Search found 6556 matches

by FiveK
Mon Apr 22, 2019 1:57 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Here are a few tax quotes I always liked Jean Baptist Colbert: "The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing." Anonymous - "A fine is a tax for doing something wrong. A tax is a fine for doing something right." And from Judge Learned Hand ...
by FiveK
Mon Apr 22, 2019 11:48 am
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

think the best way to look at it is for Shaneman to get tax software and play with it. There are other things that might be triggered that we don't think about. Although Florida might not have a state estate tax, the federal government does. What software do you recommend? I downloaded the Retiree ...
by FiveK
Mon Apr 22, 2019 1:23 am
Forum: Personal Investments
Topic: Have I figured out Roth conversion?
Replies: 18
Views: 1019

Re: Have I figured out Roth conversion?

Right, as long as you stay within the same tax bracket, that makes sense and I agree with that and I've been on board with that (should've made that clearer). But if it bumps you up to the next one, does it still make sense? I haven't done much thinking, but my gut says it doesn't make sense to pay...
by FiveK
Mon Apr 22, 2019 12:09 am
Forum: Personal Investments
Topic: Have I figured out Roth conversion?
Replies: 18
Views: 1019

Re: Have I figured out Roth conversion?

RMDs will definitely put them in a higher bracket than they are now. Death of one spouse may also leave the survivor in a higher bracket. Doing some conversions pre-RMD is a defensible strategy. Thank you for answering the question I posed. Yes, if that bumps you up 10%, a ROTH now may be wise. But...
by FiveK
Sun Apr 21, 2019 11:35 pm
Forum: Personal Investments
Topic: Have I figured out Roth conversion?
Replies: 18
Views: 1019

Re: Have I figured out Roth conversion?

OP is retired, is withdrawing, and let's face it, has an unknown amount of life left. I'm seriously not exactly sure what the point of converting is at this point. If you don't plan to have a higher tax bracket in the future why pay taxes now on taxes on a future dollar amount that probably won't b...
by FiveK
Sun Apr 21, 2019 11:09 pm
Forum: Personal Investments
Topic: Have I figured out Roth conversion?
Replies: 18
Views: 1019

Re: Have I figured out Roth conversion?

So I open a Roth, using an exchange from my existing IRA? Is that really all there is to it? Is is worth it to do this seeing as we can only convert about 10-12K per year between now and RMDs? Yes, that really is all - other than paying the tax on the converted amount. Withholding from the pension ...
by FiveK
Sun Apr 21, 2019 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

To this question, the OP is mistaken because MMM never said to withdraw 5%. He advocates a 4% withdrawal rate with the ability to be flexible during the rare occasions it may be needed. MMM does use 5% average returns as a means to figure out how much one must save and when they may reach financial...
by FiveK
Sun Apr 21, 2019 2:27 pm
Forum: Personal Investments
Topic: Roth > 457? And investing at Chase?
Replies: 6
Views: 493

Re: Roth > 457? And investing at Chase?

It depends on the answers to a few "how much...?" questions, e.g., how much - will the pension be? Pension expected to be approx $3,700/month; this is after 25 years of service (I'm 10 of 25 years in at the moment) Assuming that is in future dollars, and 3%/yr inflation, it would be ~$3700 * 12 /(1...
by FiveK
Sun Apr 21, 2019 10:47 am
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

wbrianwhite wrote:
Sun Apr 21, 2019 10:44 am
The very first article I read on this site was about eating cat food to save money on food expenses: https://rootofgood.com/confessions-frugal-millionaire/.
I'm... guessing that this is satire, but it's pretty thin satire
The publication date - April 1 - should have been the first clue.
by FiveK
Sat Apr 20, 2019 11:43 pm
Forum: Personal Finance (Not Investing)
Topic: DW worried about What if ...? Wishes to pay off mortgage
Replies: 33
Views: 3039

Re: DW worried about What if ...? Wishes to pay off mortgage

lakpr wrote:
Sat Apr 20, 2019 11:39 pm
Put another way, you are paying $5k every year for absolutely no benefit.
That's not quite true. Money not used to pay extra on the mortgage may be invested and earn more than $5K/yr. Whether it will earn that or not is what leads to the never-ending debate....
by FiveK
Sat Apr 20, 2019 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversions, taxes, and social security
Replies: 21
Views: 2207

Re: Roth conversions, taxes, and social security

Roth IRA conversion - Bogleheads may be of interest.

You don't need to wait until 59.5, although if you are still working (at any age) it may not be beneficial due to the high marginal rate you are likely to pay.
by FiveK
Sat Apr 20, 2019 5:25 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversions, taxes, and social security
Replies: 21
Views: 2207

Re: Roth conversions, taxes, and social security

FiveK always recommends the Personal Finance Toolbox for visualizing these shadow tax brackets - and it sure does produce some very instructive graphics. (I haven't personally used it because of my personal discomfort with downloading a spreadsheet off the internet - but it sure would enhance my re...
by FiveK
Sat Apr 20, 2019 5:12 pm
Forum: Personal Investments
Topic: Roth > 457? And investing at Chase?
Replies: 6
Views: 493

Re: Roth > 457? And investing at Chase?

...the more I am starting to think I should prioritize a Roth IRA over my 457 plan. Is this advisable? It depends on the answers to a few "how much...?" questions, e.g., how much - will the pension be? - would you save (percentage-wise) on a traditional contribution now? - do you expect to pay (per...
by FiveK
Sat Apr 20, 2019 4:27 pm
Forum: Personal Investments
Topic: Taxable vs. tax-deferred savings
Replies: 6
Views: 852

Re: Taxable vs. tax-deferred savings

So we’re wondering whether we should stop funding our retirement accounts at the end of this year and focus entirely on funding our “early retirement fund.” Assuming positive investment returns, Roth always beats or is no worse than taxable. If you have a Roth option for your 403bs, you could contr...
by FiveK
Sat Apr 20, 2019 3:19 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Sorry for the confusion - Yes almost all "qualified". Looking at 2018 tax returns 3a Qualified dividends $297K 3b Ordinary dividends $305K I believe you have misinterpreted line 3 on your tax form. You have $297k that is taxed as qualified dividends (at long term cap gains rates) and an additional ...
by FiveK
Sat Apr 20, 2019 3:05 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Edit: Ah ha ... got it. The $200,000 threshold for NIIT is based on MAGI rather than taxable income, so itemized deductions don't affect it. Yes, that's it. Apologies if this is belaboring the point, but you seem tax-adept enough that you (and probably many other frequent posters here) would enjoy ...
by FiveK
Sat Apr 20, 2019 2:40 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Hmmm ... I really shouldn't be doing this marginal tax stuff in my head.... Agreed - that's what spreadsheets are for. ;) I think the best way to look at it is for Shaneman to get tax software and play with it. There are other things that might be triggered that we don't think about. Agreed - check...
by FiveK
Sat Apr 20, 2019 2:10 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Hmmm ... I really shouldn't be doing this marginal tax stuff in my head.... Agreed - that's what spreadsheets are for. ;) Single filer age 55 with $300K qualified dividends: That's for $300K QDiv, but no charitable deductions, right? THANKS! A picture is worth 1000 words. (At least that shows more ...
by FiveK
Sat Apr 20, 2019 1:43 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

cas wrote:
Sat Apr 20, 2019 1:33 pm
Hmmm ... I really shouldn't be doing this marginal tax stuff in my head....
Agreed - that's what spreadsheets are for. ;)

Single filer age 55 with $300K qualified dividends:
Image
by FiveK
Sat Apr 20, 2019 12:52 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

retiredjg wrote:
Sat Apr 20, 2019 12:33 pm
...but there must be some number in between that is "just right".

Is this nuts?
Sure hope not, because we did something very much like that in 2017. :)
by FiveK
Sat Apr 20, 2019 12:25 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 56
Views: 3124

Re: Should I start doing Roth Conversions and if so

Should I start doing Roth Conversions...? Probably. Have you compared your current marginal rate to what you expect it will be at age 70+? Yes, NIIT, IRMAA, possibly AMT, SS benefits, etc., will affect you. You can generate a chart of your marginal rates that includes all those by using the persona...
by FiveK
Sat Apr 20, 2019 11:54 am
Forum: Personal Finance (Not Investing)
Topic: Marketwatch Article on Back Door Roths
Replies: 12
Views: 1579

Re: Marketwatch Article on Back Door Roths

For the example given in the article though, assuming the existing tIRA doesn't have any basis (ie. no deductible contributions) and the $5000 non-deductible contribution were made between Jan 1 and April 15 2019, there isn't any additional tax is there? A couple of things: - In the context of Form...
by FiveK
Sat Apr 20, 2019 2:41 am
Forum: Personal Finance (Not Investing)
Topic: Marketwatch Article on Back Door Roths
Replies: 12
Views: 1579

Re: Marketwatch Article on Back Door Roths

... do a rollover of the entire IRA amount whereby the $5,000 nondeductible amount is rolled over to the Roth IRA and the $45,000 taxable amount is rolled over to a new IRA. And no taxes are owed for this transaction on that year’s return. So, no the part you quoted isn't a pitfall and the professo...
by FiveK
Sat Apr 20, 2019 1:40 am
Forum: Personal Finance (Not Investing)
Topic: Marketwatch Article on Back Door Roths
Replies: 12
Views: 1579

Re: Marketwatch Article on Back Door Roths

... do a rollover of the entire IRA amount whereby the $5,000 nondeductible amount is rolled over to the Roth IRA and the $45,000 taxable amount is rolled over to a new IRA. And no taxes are owed for this transaction on that year’s return. So, no the part you quoted isn't a pitfall and the professo...
by FiveK
Sat Apr 20, 2019 1:30 am
Forum: Personal Investments
Topic: Am I supposed to start backdoor Conversation now?
Replies: 11
Views: 1198

Re: Am I supposed to start backdoor Conversation now?

So my question is I have heard 5 years prior to 59 1/2 ( I am currently 54 1/2) you should start converting over. Does this hold true as I said if only about 25% of my money is in a 401k or what say you all and do you need more info? There is the Backdoor Roth process to put current year earnings i...
by FiveK
Sat Apr 20, 2019 1:14 am
Forum: Personal Finance (Not Investing)
Topic: Advice on How to Find Competent Social Security Advisors (St Louis area)
Replies: 6
Views: 739

Re: Advice on How to Find Competent Social Security Advisors (St Louis area)

NOLA Rob wrote:
Fri Apr 19, 2019 2:08 pm
...they have a mix of state pensions and SS.
If they also might benefit from some traditional to Roth conversions before SS and/or RMDs begin, that could move an SS-only answer to a later benefit start.
by FiveK
Sat Apr 20, 2019 1:09 am
Forum: Personal Investments
Topic: Starting a Backdoor Roth IRA
Replies: 4
Views: 402

Re: Starting a Backdoor Roth IRA

... can we both do 2 individual ROTH conversions? Welcome to Bogleheads! We have a Wiki for this. Take the time to read and get a solid education on this. Yes, welcome! Do take Silk's advice and read before acting. Words such as contribution, conversion, rollover, and recharacterization have very s...
by FiveK
Sat Apr 20, 2019 12:55 am
Forum: Personal Finance (Not Investing)
Topic: Marketwatch Article on Back Door Roths
Replies: 12
Views: 1579

Re: Marketwatch Article on Back Door Roths

Fortunately some of the comments corrected various errors. :)

Unfortunately some of the comments contained other errors. :(
by FiveK
Sat Apr 20, 2019 12:52 am
Forum: Personal Investments
Topic: Help calculating after tax yield
Replies: 8
Views: 384

Re: Help calculating after tax yield

strongboy2005 wrote:
Sat Apr 20, 2019 12:29 am
...even better help me understand the concept so I can do it myself
After-tax return will be r*(1-t), where
r = before tax return
t = tax rate applied to the income from that investment.

Does that suffice?
by FiveK
Sat Apr 20, 2019 12:48 am
Forum: Personal Investments
Topic: HSA rollover
Replies: 1
Views: 259

Re: HSA rollover

Was there a reason given for less than 100% rolled over?
by FiveK
Fri Apr 19, 2019 11:38 am
Forum: Personal Finance (Not Investing)
Topic: DW worried about What if ...? Wishes to pay off mortgage
Replies: 33
Views: 3039

Re: DW worried about What if ...? Wishes to pay off mortgage

If the worst happens and you both die, the primary consideration at this age should be "who will take care of your child?" That is something you can specify in a will - presumably after you have talked to the person(s) who you will specify. In all likelihood, your current house would be sold because...
by FiveK
Fri Apr 19, 2019 11:31 am
Forum: Personal Investments
Topic: Help with Roth distribution on taxes
Replies: 7
Views: 441

Re: Help with Roth distribution on taxes

Looks good.

Did you also have $20K on line 15a of https://www.irs.gov/pub/irs-prior/f1040--2017.pdf, and $0 on 15b?
by FiveK
Fri Apr 19, 2019 10:50 am
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

Random Poster wrote:
Fri Apr 19, 2019 9:51 am
But if one can reasonably get from 40 times expenses to 50 times expenses in 3 or 4 years, and as a result have a better chance of surviving all but the most catastrophic of situations, isn't that trade off worth it?
No.

Of course it's only an opinion, not a fact, whichever way one responds.
by FiveK
Thu Apr 18, 2019 8:26 pm
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

The "but what if something worse happens?" game is never-ending. Different people have different risk tolerances (not to mention perceptions of what constitutes risk), so there will never be unanimity here.
by FiveK
Thu Apr 18, 2019 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

But then, at year 6, everything plummets and now you only have half of what you started with. Things stay glum for 5 years. At year 10, things get even worse, and everything loses another 50% of its value, so now you have 1/4th of what you started with. Is that worse than the worst of the past? No ...
by FiveK
Thu Apr 18, 2019 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

Random Poster wrote:
Thu Apr 18, 2019 12:48 pm
But then, at year 6, everything plummets and now you only have half of what you started with. Things stay glum for 5 years. At year 10, things get even worse, and everything loses another 50% of its value, so now you have 1/4th of what you started with.
Is that worse than the worst of the past?
by FiveK
Thu Apr 18, 2019 12:40 pm
Forum: Personal Investments
Topic: next dollar of savings
Replies: 39
Views: 3089

Re: next dollar of savings

my goal is to pick the optimal mix of savings vehicles (post-tax, pre-tax, debt paydown) to maximize lifetime investment income and minimize lifetime taxes I think I can save $40k this year. How should I allocate that to: His 401k: $__ His HSA: $__ His Roth IRA: $__ Her Roth IRA: $__ His Roth 401k:...
by FiveK
Thu Apr 18, 2019 11:00 am
Forum: Personal Investments
Topic: next dollar of savings
Replies: 39
Views: 3089

Re: next dollar of savings

my goal is to pick the optimal mix of savings vehicles (post-tax, pre-tax, debt paydown) to maximize lifetime investment income and minimize lifetime taxes I think I can save $40k this year. How should I allocate that to: His 401k: $__ His HSA: $__ His Roth IRA: $__ Her Roth IRA: $__ His Roth 401k:...
by FiveK
Wed Apr 17, 2019 11:11 pm
Forum: Personal Investments
Topic: New job, please critique our investment plan
Replies: 21
Views: 1087

Re: New job, please critique our investment plan

Kettlebells wrote:
Wed Apr 17, 2019 10:59 pm
...is there a downside to holding the majority of our accounts at one bank? Something like this:...
No.
My understanding is that Fidelity has excellent index funds and has very good customer service.
Yes.
by FiveK
Wed Apr 17, 2019 10:50 pm
Forum: Personal Finance (Not Investing)
Topic: Mr. Money Mustache, SWR, and equity allocation
Replies: 524
Views: 39138

Re: Mr. Money Mustache, SWR, and equity allocation

I am sure many do that as a choice, but there are also many that live a very full life, and through some combination of hard work and fortunate circumstances find themselves in a position to FIRE without having to make the dire sacrifices you seem to be implying are part and parcel of that choice. ...
by FiveK
Wed Apr 17, 2019 10:48 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated Tax Filing Steps - Please help/confirm
Replies: 5
Views: 417

Re: Estimated Tax Filing Steps - Please help/confirm

dadipsite wrote:
Wed Apr 17, 2019 7:56 am
I have to make Estimated Tax Payments for 2019 (first time) and am already behind a couple of days! :(
Any chance that either you or your spouse can increase withholding instead of doing estimated?
by FiveK
Wed Apr 17, 2019 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: Not Maxing 401K OK?
Replies: 39
Views: 3951

Re: Not Maxing 401K OK?

Nissanzx1, until you make an estimate of your marginal tax rate on traditional withdrawals, you might as well be flipping coins to decide Roth vs. traditional. See Investment Order for general suggestions, plus (toward the bottom of the post) one way to do that estimate. As for the thread title, of ...
by FiveK
Wed Apr 17, 2019 8:41 pm
Forum: Personal Investments
Topic: New job, please critique our investment plan
Replies: 21
Views: 1087

Re: New job, please critique our investment plan

As mentioned, I am starting a new job soon. Our gross income will increase significantly. My new job has a 401(k).... Reading between the TSP lines, you would have been looking at a good pension had you stayed there, perhaps making Roth contributions more favorable for you. Now with a much higher i...
by FiveK
Wed Apr 17, 2019 8:36 pm
Forum: Personal Investments
Topic: New job, please critique our investment plan
Replies: 21
Views: 1087

Re: New job, please critique our investment plan

With prudent investing, I think you can beat 4% nominal in equities market. A 60:40 portfolio should do it handily. Once your mortgage balance goes to near about $380k (I baked in a bit of inflation to get to this figure), suddenly your effective interest on the mortgage zooms to 4%(1 - 0.32) = 5.8...
by FiveK
Wed Apr 17, 2019 7:25 pm
Forum: Personal Finance (Not Investing)
Topic: [2018 tax return - How does it compare to previous years?]
Replies: 424
Views: 28729

Re: [2018 tax return - How does it compare to previous years?]

There are many moving parts (we had a very large cap gain in 2017, and I had a very large 179 business equipment purchase in 2017, my Keough contributions were different year-over-year) so it's hard to do a true comparison. But AGI seems like the correct starting point, no? No. Not with capital gai...
by FiveK
Wed Apr 17, 2019 7:22 pm
Forum: Personal Investments
Topic: Retirement Advice - Annuity or Not? RMD?
Replies: 27
Views: 1380

Re: Retirement Advice - Annuity or Not? RMD?

Accounts: -Annuity...: $165,000 For a guaranteed lifetime withdrawal with NO beneficiaries and fixed income [starting] now: $860 a month See chart below for the pure math analysis. Overlay that with your hopes/fears for the future - for example, - high inflation would favor the lump sum - poor mark...
by FiveK
Wed Apr 17, 2019 5:55 pm
Forum: Personal Investments
Topic: Retirement Advice - Annuity or Not? RMD?
Replies: 27
Views: 1380

Re: Retirement Advice - Annuity or Not? RMD?

Accounts: -Roth IRA: $50,000 -Annuity, with a guaranteed 7% growth: $165,000 ... However, I need to start taking money out of my annuity at age 70.5 due to RMD. This annuity is already an IRA, and subject to all the IRA related rules including tax reporting and RMDs. I'm guessing it's the "due to R...
by FiveK
Wed Apr 17, 2019 4:53 pm
Forum: Personal Investments
Topic: Retirement Advice - Annuity or Not? RMD?
Replies: 27
Views: 1380

Re: Retirement Advice - Annuity or Not? RMD?

I would get $164,838.79 if I withdrew today. All of it would be taxable. I THINK I could roll it over to an IRA if I wanted to. If the entire $164,838.79 could go into a traditional IRA that implies none of it would be taxed immediately. Withdrawals from that IRA would be taxed, but at a lower rate...
by FiveK
Wed Apr 17, 2019 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 591

Re: Conversion vs Roth 401k Contribution

I'll post my usual caution. If you have holdings in taxable, then you will have some qualified dividends residing in the 0% capital gains slot. If so, then not all of the 12% bracket is actually 12%. There will come a point where you will bump QDivs out of 0% into 15%, giving a net tax on that conv...